Energy Wholesale Market Review, 5 March 2021

Headlines

It was a largely bullish week for gas and power contracts this week. Day-ahead gas rose 9.3% to 44.70p/th, as the system was largely undersupplied for the majority of the week. Day-ahead power similarly rose, lifting 1.6% to £67.00/MWh, following tight supply margins, with periods of correlated low wind output. April 21 gas was up 6.4% at 40.49p/th, and May 21 gas increased 1.2% to 38.43p/th. All seasonal gas contracts rose this week, up by 1.7% on average. Summer 21 and winter 21 gas increased 2.1% and 3.3% respectively, lifting to 39.46p/th and 50.24p/th. All seasonal power contracts climbed this week, up on average by 1.6%, as summer 21 and winter 21 gained 1.5% and 3.2% to £50.75/MWh and £60.75/MWh, respectively. Brent crude oil prices fell this week, down 1.1% to average $64.93/bl. However, prices rebounded on Friday 5 March, reaching a new 14-month high of $68.22/bl, gaining support from OPEC+ agreeing to extend supply cuts out to April. This measure helped to ease market fears over lack of demand and market oversupply, as the market still continues to recover in the aftermath of Coronavirus. EU ETS carbon prices fell this week, declining 1.1% to average €37.61/t. Despite losses this week, carbon prices are still notably higher than at the back-end of 2020.

Baseload electricity
  • Day-ahead power rose 1.6% to £67.00/MWh, following tight supply margins during the week with correlated low wind output.
  • April 21 power slipped 2.2% to £51.60/MWh and May 21 power increased 2.9% to £50.25/MWh.
  • Q221 power moved 1.4% higher to £51.00/MWh.
  • The annual April 21 contract rose 2.4% to £55.75/MWh, 29.4% higher than the same time last year (£43.09/MWh).

Forward curve comparison

Baseload electricity Forward curve comparison 5 March 2021

Annual April Contract

Baseload electricity Annual April contract 5 March 2021

Peak electricity
  • Day-ahead peak power was down 0.6% to £78.00/MWh, following trends from its baseload counterpart.
  • April 21 peak power declined 2.0% to £54.48/MWh, and May 21 peak power increased 1.2% to £54.45/MWh.
  • The annual April 21 peak power contract lost 0.9% to £62.16/MWh.
  • This is 27.2% lower than the same time last year (£48.88/MWh).

Forward curve comparison

Peak electricity Forward curve comparison 5 March 2021

Annual April contract

Peak electricity Annual April contract 5 March 2021

Seasonal power prices

Seasonal baseload power contracts

Seasonal power prices Seasonal baseload power contracts 5 March 2021

Seasonal baseload power curve

Seasonal power prices Seasonal baseload power curve 5 March 2021

  • All seasonal power contracts increased this week, up on average by 1.6%.
  • Summer 21 and winter 21 gained 1.5% and 3.2% respectively, rising to £50.75/MWh and £60.75/MWh.
  • All seasonal peak power contracts climbed this week, up 0.7% on average.
  • Summer 21 and winter 21 peak power lifted 0.3% and 1.4% to £54.88/MWh and £69.43/MWh, respectively.
Commodity price movements

Oil and Coal

Commodity price movements Oil and Coal 5 March 2021

Carbon

Commodity price movements Carbon 5 March 2021

  • Brent crude oil prices fell this week, down 1.1% to average $64.93/bl. However, prices rebounded on Friday 5 March, reaching a new 14-month high of $68.22/bl.
  • Brent crude markets this week gained support from OPEC+ agreeing to extend supply cuts out to April, easing market fears over lack of demand and market oversupply, as the market still continues to recover in the aftermath of Coronavirus.
  • API 2 coal rose 2.6% from the previous week to average $69.36/t.
  • EU ETS carbon prices fell this week, declining 1.1% to average €37.61/t.
  • Despite losses this week, the carbon market still continues to see prices notably higher than recent months. Bullish sentiment in the Brent crude market amid extended supply cuts from OPEC+ into April has sent positive signals to the carbon market.
  • Prices may be weighed upon by warmer weather next week, expected to reach the UK and Europe next week.
Wholesale price snapshot 

Wholesale price snapshot 5 March 2021

Posted by TEAM on 5 March 2021
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